Why am I still an Agent?

[beyert1]

I was having a conversation with one of my Account Representatives yesterday and it was not a "happy" one. I was asked why I was not producing that much in new business for the company. I had said in the past the rates were too high in my area for specific products and he agreed but still he wanted more sales. So how did I respond to his statement? I just let loose on him and told him exactly what I thought and it went something like this.

I continue to watch commercials where the insurance companies are telling the consumer they have the "cheapest" rates of any company out there. The consumer is eating this up and then going with the assumption they have to find the policy with the cheapest rate or they are a complete idiot. However, they are not being told what the difference in the coverage is and when I try to explain it to the client, they don't care anymore they just go and look for a lower rate because they think I am trying to throw the wool over their eyes.

I also let him know the commercials are telling the client to go to the companies website or to give the 800 number a call to get a quote. Basically, they want to bypass the agent all together but then tell us we are not doing our job when our policy count has not increased.

I as an agent took a long class to learn the information to pass a very difficult test. I also have taken countless hours of continuing education as well as attending their rah rah seminars about the products, invested thousands of dollars into advertisement, staff, technology and so much more all to be replaced by a website. Now, how can someone who does not even know the basics of insurance become a total freaking expert by being told which is Good, Better and Best?

I then went on to let him know that we are not able to get to the client like we once use to. These days real estate offices, mortgage brokers, banks and car dealerships all have insurance offices located directly inside of them. The offices even tell the client they will give them a discount if they use their insurance agent. How I am suppose to compete with this? If I have a client and they are selling their house and buying a new one the realtor and mortgage person are in the same office, they are offering my client the same product and at a discount "in a way" and I can't do this. Who are they going to go with? That is right, their new insurance agent and they will cut me out. So, there goes the client I spent time and money procuring and taking care of. Does the insurance company care, nope. They have the client and they don't care how they got them.

After we went through all of this I then went on to explain how in my building we have a TWFG agent who is brand new. Now, she may have experience in insurance but she was just recently licensed. The reason I think she has experience is because her husband is a State Farm Agent down the street and she now has an office here. So, clients he can't write are now going to go to her thus cutting the client from coming down the street and seeing my sign. How is this fair if a guy decided to be a captive agent but figures out he can make even more money by breaking the rules and having his wife be an agent under her maiden name? It is not but it is the way one part of the industry is going.

My wife tried to explain to me and I would not listen, how the industry is going to be a second thought. It use to be where insurance was important to have and now it is nothing but a thing we are required to have but don't really think about it until they need it. Then, when they need it and it is not what was expected they come and sue the agent because we tried to explain but they did not want to listen. Or what is even worse, they went to an agent and he/she did not care and just sold them what they wanted. And since it is getting better for the client, they can also get screwed directly from the insuring company because the phone representative sold them what they wanted or they chose good, better or best on-line.

I keep asking myself, why do I still want to be an agent. I will be honest, I love selling insurance. I love being able to assist my clients who want the proper direction to get it. I want the clients who feel it is necessary to have an agent to have one. But, these clients are becoming fewer and far between. Why? Because the art of conversation is going away quickly. Many individuals do not want to make eye contact while they could just as easily make the decision they as the "educated" consumer can make while online. Oh well, will I continue to be an insurance agent? Honestly, I don't know it is becoming so difficult to get and keep the business. We will see what will happen in the near future and how the world of insurance will turn.

Thanks for letting me vent. I hope you enjoyed it.

[wsouth44]

This is both inspirational and sad at the same time. You did a great job of explaining your situation and the state of the industry, and this message should be distributed far and wide, although I don't know if it would change things. Good luck in whatever line of business you're in in the future. Whoever you work for will have - at the very least - a good, thoughtful communicator.

[d's insurance store]

Face it, for the general, retail insurance practice agency owner, this is a dying business. The 'next' generation of insurance buyers for the personal lines and small commercial products aren't calling us any more, they're whipping out their smart phones and transacting business that way.

Honestly, when was the last time you had a constructive conversation about different auto liability limits? People either have assets worth protecting or they don't. 15/30/10 or 250/500/100. Does anybody really select 50/100/25 any more?

And what about the small commercial 'main street' market place? Just how many Mom & Pop service or retail locations exist any more?

The days of learning the trade, hanging out a sign, buying the biggest ad in the Yellow Pages, doing some direct mail, making friends with real estate and title/escrow people and joining the local Lion's Club and building a successful business are long gone.

It doesn't mean you or I are going out of business today or tomorrow, it just means the easy years of growth are history. Now, keeping even is considered success and if you can't maintain that, then at least stem the loss of clients and premium to a minimum.

For many of us general practice agency owner's, advanced age is a good thing. Much of the market place is giving us the heave-ho and the appreciation for what we can bring to the equation is falling on deaf ears. The future belongs to the giant agencies that can exploit the economies of scale and the very specialized risk managers for commercial accounts. For the rest of us, a march towards the tar pits is our fate.

As for that marketing rep you refer to, he/she is under enormous pressure to bring the business in an environment that for most of us isn't growing. It's a zero sum game where when you acquire a policy, someone else has lost one.

I consider myself a pretty good forecaster, and even I didn't see this coming 15 years ago. As a small, neighborhood agency I can only hope that within a few years, when it comes time to unplug the computers, there will be a large whale of an agency that will want to buy what I have left.

[Sports_Agent]

... REALLY? With your attitude I suspect career planning is in your future. If people simply bought on price Mercedes, Lexus, etc. would never sell another product. A well trained salesman can $ell! Intelligent consumers want an agent to advise them. Commercial Insurance is far too complicated to be sold on the internet. The online internet market share is actually decreasing. This may seem abrupt but you need to change your attitude or change your career... Good Luck, I suspect you will need it!

[beyert1]

Sports_Agent - interesting reply but do I agree or disagree with a change in career, yes, I do agree. I will most likely have one. The sad part is, I do love to sell insurance and advise people on what is necessary for their protection. Do people buy Lexus, Benz, Infinity for the quality? Yes. But they also look to save money anyway they can and insurance is one expense they try and cut. I mean when you argue with a new Tesla owner as to why it is less expensive to insure his Porsche and why this can't be changed gets a little ridiculous. I mean they just spent over $150k on each vehicle. Come on! And I am arguing with them over $500 a year?

As for my attitude, I am sure you have perceived it differently than it actually it. Did I sound very angry when writing this post? Yes. Was I unhappy about the situation? Yes. Why did I write it? Because it is the truth of what is going on. Just like D's Insurance Store said, it is changing and it will change. People do not want to go and buy insurance from the small and personal insurance agent. They want to do it online. As for commercial insurance and it still being out there, yes it is. The problem is every other agent is going after it. I made call after call and sent email after email out. The responses varied. I did obtain some business but I was sent back so many replies of, thank you but you are the 10th agent to get in touch with me this week. Since the home/auto market is going 800 and online every agent is going after the commercial market. So, why should I present the same thing to the client that 10 other agents are? Why should I try and find out how to discount and discount and discount and not properly insurance them when all they care about is price. And then when they do have a claim and don't have the right coverage they want to sue me because I did not do my job.

Do I see myself out of this business in a short period of time, who knows. Do I need to do something to maintain my income to support my family? Yes. I have already rid my office of the people who do not want to work. The people who just came in for a paycheck. I have reduced my space. Cut out the "extras" of the office and brought it back down to a manageable situation. Does the client care what I have to do? Nope. They care about how cheap they can get their premium.

Take a look around and see what is going on. I have way too many former captive agents in my area who went independent because they could not get a job elsewhere that I am competing with and it is just not like it once was. Now, we have agents on every corner, sometimes multiples in the same office/retail complex. They are all fighting for the same business. Somewhere something needs to change if we are going to survive and I don't know what it is.

[d's insurance store]

... REALLY? With your attitude I suspect career planning is in your future. If people simply bought on price Mercedes, Lexus, etc. would never sell another product. A well trained salesman can $ell! Intelligent consumers want an agent to advise them. Commercial Insurance is far too complicated to be sold on the internet. The online internet market share is actually decreasing.

This is the kind of claptrap I endured in my days as a captive agent, representing a company that for brief periods of time, had competitive rates, but mostly was out of the marketplace as compared to other carriers. You can only sell when a prospect wants to buy, and at least in my opinion, fewer and fewer retail consumers are actively engaged in looking for a knowledgeable, informed agent to offer up product solutions. Your comments smack of a local sales manager intent on beating out production where the consumers just aren't buying.

We can all point to the segment of our book that treats us like members of their family, lavishing praise for our every utterance on all things insurance. We can all recite the long time client relationships that have endured through rate increase after rate increase, through claim after claim, crises after crises. But as those people die off, sell their homes, move to other states or just fade away with phones disconnected and emails returned as undeliverable, there just isn't the prospect volume that transitions to client placement to make up for it.

Yes, there are agencies that find themselves in various geographic areas where they are competitive and integrated into the community and new clients find their way to the offices, but those are isolated.

The agency owner experiences a drop in phone quote activity, tries the internet, buys the leads, goes back and forth between old promotion and new attempts and still except for service and cancellation phone calls, the lines are quiet. As I alluded to in my first post, the market for personal and small business insurance isn't a growth proposition, it's a takeaway market. You win, some else loses and vice versa.

If Sports_agent has a growing agency, then my hat is off to you. If you're specialized and have found a niche that works, congrats! If you a general practicioner and have found a local area that is receptive to your wares, how nice for you. If you're located in a geographic location that responds to your prospecting efforts, feel lucky. The long term trends don't favor what has been a 'main street' staple...the smaller, personalized insurance agency.

[lonestar]

Your comments smack of a local sales manager intent on beating out production where the consumers just aren't buying.

D's, that is exactly what I thought as I read his post. Sounds exactly like a captive sales manager. Been there, done that.

Who knows what role the agent will play long term in the value proposition of the consumer. It is tougher to obtain new people to quote products to these days. Agents have to find ways to get in front of the prospective insurance buyers. That may mean spending a larger amount on digital marketing. I get most of my prospects from referrals. Existing clients, mortgage loan officers, realtors. Half the time first time home buyers have their auto with Geico. I can find the client a better value than Geico about half the time by bundling their auto and home with a preferred carrier. The other half of the time I write their home monoline if their auto needs to stay where it is at. So there is way to cut out a living for an agent. And, from the carrier's perspective, although they pay an agent commission to earn the business(I would argue that we, the agents, pay them a commission), they don't have to pay for the agent's building or his benefits, which could include 401k and / or health insurance. These costs are incurred on the call center / employee side. If an agent is making 10% commission(Giving 90% of the premium to the company), I don't see how an insurance company will save 10% if they completely cut the agents out and sell only direct. What that breakeven cost point is, I don't know. But simply having an agent to compensate, I am not yet convinced that this a large needle mover. The book is not written yet, so we will have to see where this all goes.

[JohnnyLaw]

Guys that was kind of depressing, however have been there and know where you are at more than once. I like you, work hard and pray a lot and it seems to help. Every time I loose a medium size account it brings me down but sometimes its a good thing as another one comes around to replace that is half the admin work, i.e. Certs, etc. and gives me more time for prospecting. My formula is very simplified and have some success with it. I simply do the process backwards for the most part. First have a relationship and they are all different for different reasons. Most of the time do not ask for the business but wait until they approach me (these are small business owners and already know what I do). Then I beat the rate or equal it. If cannot beat the rate then I "Aint to proud to beg", borrow or steal. Sports Agent I kind of want to say "Really" to your post. Our brother here needs help and motivation not to be kicked when he is down.

[Kay-WA]

All great commentaries, except for Sport Agent who may have missed the point a little bit. Where is that intelligent consumer I wonder every day. I have many intelligent and wonderful clients but the newer ones that buy on price alone with limited and low coverage I would rather let them go on the road. I love all my clients but the days of selling and making a profit in personal lines are dwindling. We have to be efficient. Mid-Market Commercial Lines, not the same but still we've had to trim our processes and sort out where we want to focus our business. There is a small segment of commercial lines that needs to be automated and sold quickly and efficiently or choose not to write that segment.

We don't mean to be dismal but we feel the pain and see the writing on the wall for some segments of our business. For many of us this has been an amazing ride and the last 10 years have seen so much change. New career? Perhaps, but maybe I will transition over to where my expertise is appreciated, needed, and can still be profitable. In the meantime, chin-up and keep up the good work with your current clients. There is a reason they stay with you.

[lonestar]

I can't help but wonder how the captives feel about this discussion. Any agents with State Farm, Allstate, Farmers or Nationwide care to offer your take on the future of the insurance agent?

[Smalltownagent]

I keep reading these types of threads, and hearing from other agents about the doomsday. But if anything our business is up. I acquired another small book of business not long ago, but even our organic growth is up. We're not busting at the seams by any stretch of the imagination, but we're definitely growing. Considering my specific location, and the awful local economy, I'd say that's even better news.

And its not just the "old timers" that are giving us calls. The last 3 new business (personal lines) accounts I've written have all been under the age of 40. They came via referral or our website, which is certainly no fancy website.

I will catch myself reading these types of threads and getting all worked up and worried about the future of our industry and my business specifically. Will I be able to generate the type of income I'm earning for my family in 10 years, which by the way, is providing us a very comfortable standard of living? Will it be the same? Lower? Higher? I'm not really sure to be honest. However, I know that the end of the IA has been predicted in the past (internet is going to kill the local independent agent!) etc.

I guess I'll stay optimistic, and perhaps a little naive. I'm younger than probably 95% of the other IA owners, but I think there will still be a role for us brick & mortar agents in the next 10-20 years. Our role will probably be different, we will have to adapt to change, but I'm optimistic that we'll still be around and this will be a great career. Of course I could be dead wrong, but it won't serve me that well to mope about something that may or may not happen in the future. I'll stay vigilant to manage my business in a smart and efficient way, and flexible enough to adapt to change. We'll see what the future holds but I think it'll be bright.

[d's insurance store]

And so, with some of the updated responses, you have someone who is experiencing a fall off in personal lines, but chooses to compensate by pivoting into mid commercial accounts. Another grows via acquisition and says there is some organic growth in personal lines. A third agency owner says he's 'not to proud to beg' for business when his quote is close.

These are all adaptive processes that allow for the lights to stay on and the business to perpetuate. Grow? Maybe. Tread water? Perhaps. Survive? Definitely.

As I've written, I see a clouded future for the smaller, general purpose agency, of which I'm part of. At risk today? No. Next month? No. Next year? Still no. But, five, six, eight years out? Yeah. Specialize as an agency? Well, if I wanted to work into my 70's, that's what I'd be laying the groundwork for now. But I don't want to still be here at age 75, at least as I run things today. Will my agency still be viable in that timeframe over the next 8 to 10 years? I don't think so in it's present form.

I think there will still be brick and mortar locations selling insurance going forward. But with a dramatically different mix of business. Much as there are still travel agencies that thrive, they just don't do it by just selling airline tickets, they either package travel or charge a user fee to the mono-line equivalent client. I don't feel that the retail personal lines client wanting just a single car/minimum coverage policy or maybe an auto & renter's policy is going to pay many of the bills in future years. The same for the small minimum premium BOP client. Maybe it will be a fee for service model. Maybe it will be a minimum premium/commission model. Either way, it will have to be a business model that pays for the expertise that we all profess to offer the marketplace.

[beyert1]

I have been going back and forth on charging a fee for service like many of the Agents do. My problem, unlike "Smalltownagent" is that I have new offices all around me. In the last 2 years 5 new offices have opened up within 2 miles of my office. Many of these are former captives who did not make it and since they have invested so much into their license they figured might as was well give it a try being an independent. The challenge becomes how do I compete against agents who represent the same companies I do? Does the company care? Nope. They just want the policies sold.

The client is unfortunately being dumbed down by the companies via commercials. They have been told - PAY LOWER PREMIUMS!! But do they say compare the policies? Nope. But, they are buying into the 2% deduct and don't understand it until they have to pay for a majority of their roof. You hear one companies representative telling the client they can name their own price. How in the hell can they do that? I see agencies with big billboards telling the client if they pay more than $29 a month they are paying too much. Really? We are our own devil in this matter. The companies want to reduce coverage to reduce premium. The agent is going along with it to sell but they are also charging them fees out the wazoo because they are not making any more commission. The standard good ole' agent who wants to take care of the client, avoid an E&O claim is being pushed to the side.

As for having a brick and mortar office, I am thinking about giving mine up. I don't have clients who come in anymore. I have lost all my agents because they stopped making any money and it is just me in a 400 sq ft office. I hardly have any clients who come to my office, maybe 2 a month and I deal with most of my clients via email, phone and Skype. What is this telling us? The personal touch is going away from this business. I bet I could sit naked at my desk, not a pretty picture to think of to be honest, for a day and no one would know because they would not come into my office. I am waiting to hear," well you are not doing enough advertising and the like." Well, if you think spending almost $4,000 on mailers, emails, traveling to car dealerships, mortgage brokers, banks, real estate office and anyone else who will listen to me is not advertising then I must be an idiot. I keep asking my accounts reps what is working for other agents since my actions are not working and I love the answer - "You know, I just don't know because it is slow for others as well." OK, if it is slow for them why are you telling me I need to do more business? I am at a loss.

OK - went off on a rant again. But, Smalltownagent, I am happy for you. Keep growing by buying up the dead office. Begging, I have never done and will never do. Commercial accounts I have and one day they are here and the next they are gone. A majority of the businesses around here carry the basic coverage and for a commission of what.......$75 and I have to almost call them every month to pay their bill, it is not worth my time. I like dealing with the standard Joe and Jane homeowners. Always have and always will.
Thoughts? Idea? Similar situation?

[Smalltownagent]

Beyer, I didn't mean to sound arrogant and thump by chest that I'm growing, I hope it didn't come across that way. And I don't quite understand what you mean "keep buying up the dead office." I'm growing organically, not purely through acquisition. The book I just bought was very very small. I was more or less trying to show an alternative side to the general idea that the brick and mortar "general" agent is an endangered species. Now, I'm not naive enough to think that the brick and mortar general agent will thrive in the future in all locations. However, in the types of areas that I'm in (very rural, small towns, farm and ranch) I think we'll be healthy for years to come.

I really do feel for the situation that you are in. You are correct, I do not have new agencies popping up around me. The State Farm agent in my town just changed hands for the 3rd time in the past 5 years and we have a brand new Allstate agent. However, I don't get much competition from either of them.

I do hope you are able to find a way to generate more business. I haven't started policy fees yet but I do know several agents in my area have and they are loving it.

[JohnnyLaw]

Beyert1 if you can swing it, cut down the overhead and make a office in your residence and save some $$$. If you need admin/CSR help then you can contract out to a group called Wahve, that provides this service. You probably need to separate yourself from your brick and mortar, it has bad energy. This is how I operate and do most everything over email and phone. Occasionally I do lunch , etc. with a customer. If I have a referral I do not know and wants to drop off a check, etc. I simply tell them I work out of the house and will meet them at my favorite Café in Austin called the Magnolia Grill, it has become a separate office of sorts. This may give you a new perspective and rid yourself of some baggage.